2nd Nov 2006 09:00
Vodafone Group Plc02 November 2006 2 November 2006 VODAFONE APPOINTS EDS AND IBM IN GLOBAL IT OUTSOURCING DEAL Vodafone has today agreed the terms under which EDS and IBM will manage itsapplication development and maintenance services in a global IT outsourcingdeal. The move forms part of Vodafone's strategic commitment to reduce costswhile leveraging its regional scale. Vodafone's operating companies in Germany, the UK, Hungary and the Netherlandswill work with EDS as their outsourcing partner. Vodafone's operating companiesin Spain, the Czech Republic, Australia, New Zealand, Portugal, Ireland, Greece,and, subject to board approval, Italy, will work with IBM as their outsourcingpartner. Each contract is set to run for seven years with Vodafone retaining theright to bring it to a close earlier if required. "We are confident that our chosen outsourcing partners will not only delivercost savings, but also an enhanced service," said Steve Pusey, Chief TechnologyOfficer, for Vodafone Group. "We look forward to a longstanding and productivepartnership with both of them." Each outsourcing partner will provide application development and maintenanceservices for key IT systems. Vodafone will retain full strategic control of theinitiative, which focuses on writing code for and maintaining systems such asbilling and Customer Relationship Management applications. Vodafone expects that the first wave of Vodafone operating companies will beginto adopt the new arrangements from early 2007, with the others following suitthroughout the rest of 2007. "We are pleased to have been selected by Vodafone to manage its applicationsdevelopment and maintenance in Northern Europe," said Bill Thomas, vicepresident and general manager, EDS EMEA. "By applying our applications expertiseand leveraging our global operations we will assist Vodafone in the delivery ofits strategic commitment to reduce costs while developing new services. We arecommitted to delivering an outstanding service." "With this agreement, IBM will help Vodafone to focus on its core business,"says Mike Hill, General Manager, Global Telecommunications Industry for IBM. "IBM's extensive telecommunications industry knowledge and experience will alsohelp Vodafone to accelerate its business transformation programme, drive downcosts and increase innovation to deliver competitive advantage." As previously announced, Vodafone has identified the potential to reduce unitcosts by 25 to 30 percent within three to five years. Activity levels onapplication development and maintenance during the last financial year resultedin a spend of around £560 million. Under these deals, the number of applicationdevelopment and maintenance suppliers currently used by the Group is expected tobe rationalised by the two partners, bringing greater economies of scale. TheGroup also anticipates that the initiative will result in improvements to thequality of software produced, as well as greater flexibility, leading to thefaster roll out of more varied services to customers. - ends- For further information: Vodafone Group Investor Relations Media RelationsTel: +44 (0) 1635 664447 Tel: +44 (0) 1635 664444 CAUTIONARY STATEMENT This press release contains "forward-looking statements" with respect toVodafone's anticipated benefits, including anticipated cost savings, from theglobal IT outsourcing deal described above. By their nature, they relate toevents and depend on circumstances that will occur in the future. There are anumber of factors that could cause actual results to differ materially fromthose expressed or implied by these forward-looking statements. These factorsinclude, but are not limited to the following: failure by any of the OperatingCompanies to conclude negotiations, finalise and enter into contracts with oneor both outsourcing partners; slower than anticipated roll out of theoutsourcing arrangements; failure by the outsourcing partners to perform asexpected under the outsourcing arrangements; changes in the scope of the workoutsourced; slower than anticipated transfer of certain activities to thepartners; changes in the number of staff expected to transfer to the outsourcingpartners; changes in Vodafone's IT systems; higher than anticipated costs to beincurred by Vodafone under the outsourcing arrangements; and the impact ofexchange rate fluctuations on the cost of the services to the Group.Furthermore, a review of the reasons why actual results and developments maydiffer materially from the expectations disclosed or implied withinforward-looking statements can be found under "Risk Factors, Trends andOutlook-Risk Factors" in the Group's Annual Report for the financial year ended31 March 2006. All subsequent written or oral forward-looking statementsattributable to Vodafone or any member of the Group or persons acting on theirbehalf are expressly qualified in their entirety by the factors referred toabove. No assurances can be given that the forward-looking statements in thisdocument will be realised. Neither Vodafone nor any of its affiliates intends toupdate these forward-looking statements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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